Grant Thornton cuts national executive to six

The nation’s seventh largest accounting firm, Grant Thornton, has ­overhauled its leadership structure and reduced its national executive team of 12 by half, after achieving record partner earnings for the first quarter.

The move has been interpreted as a slow and steady succession handoff from long-standing chief executive Robert Quant, whose term ends in 2015.

But Mr Quant told The Australian Financial Review: “A separate and independent succession process is being run by the board with the help of an external consultant.

“People will have a chance to be considered for that in due course."

It comes as former chairman of rival BDO, Tony Schiffmann, becomes the first Australian since the ’80s to be appointed to BDO’s global board.

Grant Thornton’s management reshuffle won’t take effect until March 2014. Auditor Matt Adam-Smith will be in charge of markets; Greg Keith brought back from Hong Kong to oversee business development and brand positioning; Paul Billingham in charge of advisory; and former Melbourne managing partner Ian Herman will become chief operating officer.

It has created two managing partner opportunities in Melbourne and Perth, following Bill Stephens’s decision to get back on the tools. A selection process is now under way.

In a note to staff, Mr Quant said the “new slimmer leadership structure" was “designed to meet the challenges of the dynamic market" and will help unlock the firm’s potential.

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The first quarter of the 2013-14 financial year “has been the most successful to date in terms of partner earnings and dividend per share" for the unlisted public company. This is bold, given the firm substantially increased its number of partners in a bailout of failed BDO NSW-Victoria last year, while profit remained static for 2012-13.

“We’ve met our internal goals, we now need to focus externally," said Mr Quant. Grant Thornton posted negative growth for the 12 months to June 30, 2013, down 4 per cent on a target of $223 million. The market for professional services remains tough. Most accountants report a degree of optimism among clients that hasn’t yet translated into sales.

They say the pipeline of consolidation activity and IPOs is better than they’ve witnessed in years, but it hinges on how big banks respond, specifically whether their risk profiles will change to support growth.

An important feature of Grant Thornton’s new structure is “it separates strategic from operational decision-making by substantially devolving operational leadership to the professional and geographic teams".

Another key objective is to expose and develop future leaders in the firm.

Grant Thornton’s first female ­partner, auditor Nicole Bradley, was elected to the board at the firm’s annual meeting on Monday.

‘Take place gradually’

She replaces Tony Marwell, who has become Brisbane managing partner following Rodger Flynn’s elevation to director of Asia Pacific for Grant ­Thornton International.

Greg Keith will step down from the board to be replaced by Melbourne insolvency partner Andrew Hewitt. Mr Quant said the changes “will take place gradually" and reflect the “a rapidly evolving market for financial services".

“We spend too much time looking internally at issues that are not that important, measuring what you have rather than what you want to have, and what our clients in five years’ time are going to need," he said.